Project Risk Management - Term Paper Example

Project Risk Management IT Risk Management Chapter The project discusses risk management in a company. Thegoal of the project is to show how to control risk in the IT project. What is risk management? Why is risk management important? The project will discuss in detail the meaning of risk management, the lifecycle of risk management, and the merits of risk management to the organization and techniques of estimating risk. The document will discuss the objectives of risk management in details. The report will also discuss the importance of risk management in project management. The report will list people involved in project risk management. Chapter 2: Introduction 2.1: Why the project is important The project will enable the project manager to know the risks that are not. The project will identify the risks to make them known and, therefore, allow the project management to avoid the risk in future. The risk management will also enable the organization to deal with the risk if it happens to occur (Verzuh, 2008).The advantage of risk management is that the project manager will experience minimum risk while carrying out the management of the project (Verzuh, 2008). 2.2: Uses of Risk Management Risk management will be so useful to the project team. The team will take precautions. Risk management will prevent the project to incur unnecessary expenses. Risk management will also prevent loss of time during the project process. 2.3: What will Risk Management talk of Risk management will discuss risks that an IT project may face during the process. Risk management will also discuss the measures that should be taken to deter the risks from occurring during project cycles. It will also consider the people who will be involved in risk management and their roles. The risk management will also discuss how to recover if the risk occurs. 2.4: Definitions 2.4.1: Risk The risk is an uncertain occurrence that may have positive or negative outcome of the project (Heinz-peter, 2010). 2.4.2: Risk management Risk management is the method or the process of application knowledge in project process identifies, minimize and prevent risks and recovering the project initial status if the risk happens (Pieplow, 2012). 2.4.3: Risk Manager It is an expert who has required skills to manage the occurrence of a risk (Heinz-peter, 2010). Chapter 3: Background 3.1: Who are involved in Risk Management Process A number of who will be in the process of risk management. They include; Project Manager, Project Analyst, Customers of the software or the owner of the system, Financial Manager, The system designer, the developer (Verzuh, 2008). Chapter 4: Project 4.1: Project Management Process Project definition Project risk management is in project planning. When planning risk management, it must be done carefully. If the risk is identified later during the project process is will be so expensive to recover. It is better to prevent than to cure. 4.2: Risk Management Lifecycle Source: (Pieplow, 2012). The following are steps are used in risk management. They include; 1) Identify the Risk 2) Risk analysis and prioritize: Qualitative and Quantitative Risk Analysis 3) Evaluation of the risk 4) Implementation of Solution(s) to the Risk 5) Control and Monitoring (Pieplow, 2012). 4.2.1: Identify the Risk It is a stage where the risk is is determined. All possible threats are by thorough application of the knowledge, the skills, and the experience. Identification of the risk involves for methods (techniques). Those are; experience (That is learning from the past), asking all those who are involved (stakeholders), comparing the project to another previous project and analyzing the threat from planning and scheduling. If you do not know the risk, ask those who are involved in project management the possible occurrences that are not desirable to the system (Verzuh, 2008). Applying the lesson that you learn from another project management process is an essential thing. It will help you to prevent you from getting into similar undesirable occurrence as the one of the past. History is a tool that is use to predict the future. The risk manager of project management process should the projects that they did before to predict possible risks in future It is crucial for you to have an experience concerning the project. It is imperative to involve the customers, financial managers and all stakeholders who had done the project before. The stakeholders will help you in order to ensure that the project is successful. Identification of the risk will create awareness. Risk awareness will help everyone in the IT project management to have a clue of threats in project process (Verzuh, 2008). 4.2.2: Risk Analysis and prioritizing Risk analysis involves identifying the threats, estimating the risk and classifying the risk. Identification of the risk involves describing what the uncertainty that may occur, in brief, describing the possible results of the uncertainty. Risk estimation involves three techniques. Those are; Analytical method, parametric method, and Comparative Method. Professional guesses and history are also techniques that are used to estimate risks. Analytical estimation is where risk manager has experience from the similar project. Parametric estimation will involve calculations. Comparative will include the risk manager to have an experience from another project (Verzuh, 2008). 4.2.2.1: Qualitative Analysis Qualitative analysis involves an advanced identification of the risk and the effect of the risk to the system development process (Pieplow, 2012). 4.2.2.2: Quantitative Analysis Quantitative analysis involves analyzing the effects of the identified possible occurrences in the system (Pieplow, 2012). 4.2.3: Evaluation of risk After the analyzing the risk, the risk will be evaluated whether it is acceptable or not. The risk is taken to be acceptable if there is no solution to it, or the risk is low. If the risk is acceptable, the project manager will monitor it (Heinz-Peter, 2010). 4.2.4: Implementation of Solution(s) to the Risk the stage of implementation of the solution involves finding the best way to reduce the occurrence of an undesirable event (Verzuh, 2008). 4.2.4.1: categorize of risk response There are five categorize of risk management response. Those are; 1) Accepting the undesirable occurrences (risks) - you identify the risk and analyze the effects of the risk then you do not do anything about it (Verzuh, 2008). 2) Avoiding risk to occurred. It is done by ensuring proper analysis the project development 3) Plans for the risk that may occur. If it occurs, it will be easier to handle it and reduce its impact. Here you prepare yourself for future (Verzuh, 2008). 4) Another way of dealing with the risk is by transferring the risk. It is done by paying an insurance company. In case the risk will occur, the insurance company will be in a position to pay for damage cost (Verzuh, 2008). 5) Mitigating the risk – all the stakeholders work hard to ensure that risk does not occur during the project process (Verzuh, 2008). 4.2.4: control and monitoring Monitoring would involve estimation of addition cost if the risk were found to be acceptable. New risks are, and existing risks are watched (Heinz-Peter, 2010). Chapter 5: Summary Risk management is a process of application of knowledge, skills, and experience. It involves five stages. They include; Identification of Risk, Risk Analysis, Risk Evaluation, Solution to the risk, Monitoring, and control. There are two categories of risk analysis. Those categories are qualitative and quantitative analysis. Risk management process involves people such as; Project manager, customer, designers, analyst to mention just but a few. References Dr. Wallmüllerrisk E., Management for IT and Software Projects. Heinz-peter B. (2010): Risk management: procedures, methods and experiences. Pieplow B. (2012): Project Risk Management Handbook: A Scalable Approach Verzuh E. (2008): The Fast Forward Mba: Project Management, Third Edition, doi: 978-0470-24789-1 Read More